Milam v. Mason Technologies, BRB 00-270

CourtCourt of Appeals of Longshore Complaints
Writing for the CourtSMITH, Administrative Judge
PartiesJERRY MILAM, Claimant-Petitioner v. MASON TECHNOLOGIES and CIGNA, Employer/Carrier-Respondents
Docket NumberBRB 00-270
Decision Date22 November 2000

JERRY MILAM, Claimant-Petitioner


and CIGNA, Employer/Carrier-Respondents

BRB No. 00-270

November 22, 2000

Appeal of the Decision and Order of Robert D. Kaplan, Administrative Law Judge, United States Department of Labor.

Raymond Rivera Esteves (Juan Hernandez Rivera & Assoc.), San Juan, Puerto Rico, for claimant.

Antonio M. Peluzzo-Perotin (Colón, Colón & Martinez), San Juan, Puerto Rico, for employer/carrier.

Joshua T. Gillelan II (Henry L. Solano, Solicitor of Labor; Carol A. DeDeo, Associate Solicitor), Washington, D.C., for the Director, Office of Workers' Compensation Programs, United States Department of Labor.

Before: SMITH and McGRANERY, Administrative Appeals Judges, and NELSON, Acting Administrative Appeals Judge.


SMITH, Administrative Judge

Claimant appeals the Decision and Order (1998-LHC-2438) of Administrative Law Judge Robert D. Kaplan rendered on a claim filed pursuant to the provisions of the Longshore and Harbor Workers' Compensation Act, as amended, 33 U.S.C. §901 et seq., as extended by the Defense Base Act, 42 U.S.C. §1651 et seq. (the Act). We must affirm the administrative law judge's findings of fact and conclusions of law if they are supported by substantial evidence, are rational, and are in accordance with law. 33 U.S.C. §921(b)(3); O'Keeffe v. Smith, Hinchman & Grylls Associates, Inc., 380 U.S. 359 (1965).

Claimant worked as a facilities manager for employer, a contractor with the Navy, on the United States Naval Station at Roosevelt Roads in Ceiba, Puerto Rico. Tr. at 55. On February 22, 1994, claimant slipped and fell in a flooded area of a restroom during the course of his employment. Tr. at 51-53. He injured his knee, mouth, neck, right shoulder and lower back in the accident, and he has not returned to work. See Jt. Ex. 2; Tr. at 51. After continuing claimant's salary for a few months, employer began paying temporary total disability benefits on May 1, 1994. It continued to pay these benefits, totaling $107, 146.72, through May 30, 1998. Jt. Ex. 6; Tr. at 62. In 1995, claimant filed a civil action against the United States under the Federal Tort Claims Act (FTCA), 28 U.S.C. §2671 et seq. On August 18, 1997, he and his wife entered into a settlement with the government for $50, 000. Jt. Ex. 3.

The administrative law judge found that claimant had not obtained prior written approval of the settlement from employer as required by Section 33(g) of the Act, 33 U.S.C. §933(g), and that the settlement in the civil suit was for less than claimant's compensation entitlement under the Act. Decision and Order at 3. He found that employer's knowledge of the settlement did not amount to its approval, that claimant's wife's participation in the settlement did not bar application of Section 33(g), and that the third-party action had not been discussed in the informal conference and, even if it had, nothing the claims examiner may have told claimant would have nullified employer's rights under Section 33(g). Id. at 4-7. On the primary issue before the Board, the administrative law judge found that, although the United States "does not fit neatly" into the Act's definition of "person" in Section 2(1), 33 U.S.C. §902(1), it is included in the definition because of Section 33's purpose of protecting employers from insufficient settlements. Therefore, the administrative law judge concluded that Section 33(g) applies to bar claimant's future benefits because he failed to obtain employer's prior written approval before settling the civil action with the government. Id. at 7-8. Consequently, the administrative law judge terminated claimant's disability and medical benefits. Id. at 8. Additionally, the administrative law judge declined to address arguments regarding employer's contractual duty to secure workers' compensation insurance as required by the laws of Puerto Rico, as claimant raised this argument for the first time in his post-hearing brief. Id. at 5.

Claimant appeals the administrative law judge's decision. He argues that the administrative law judge erred in failing to admit the documentary evidence he submitted with his post-hearing brief, as those documents merely supported issues raised at the hearing and they posed no surprise to employer. Claimant also seeks reinstatement of his benefits, arguing that Section 33(g) does not apply for a variety of reasons. Finally, he contends he is entitled to an attorney's fee. Employer responds, urging affirmance of the termination of benefits. The Director, Office of Workers' Compensation Programs (the Director), responds solely on the issue of whether the United States is included in the Act's definition of a "person" at Section 2(1). He agrees with claimant that the definition does not include the federal government or its agencies.

Initially, we deny employer's "motion" to dismiss claimant's petition for review and brief as untimely. This "motion" was included in employer's response brief and, consequently, it does not comply with the requirements set forth in the regulations because it was not made in a separate document. Fuller v. Matson Terminals, 24 BRBS 252 (1991); 20 C.F.R. §802.219(b). Moreover, contrary to employer's assertion, claimant's brief was due 30 days after his receipt of the acknowledgment of the appeal, making it due on or before January 23, 2000. 20 C.F.R. §802.211. Claimant's brief was filed in a timely manner on January 13, 2000.

Next, we reject claimant's contentions of error concerning the administrative law judge's refusal to admit post-hearing evidence and his failure to address employer's duty under its contract with the United States Navy and under the laws of Puerto Rico to obtain insurance coverage.[1] Although this issue was included on claimant's pre-hearing statement, Jt. Ex. 8, the only evidence concerning insurance coverage submitted at the hearing appears to relate to employer's coverage for Defense Base Act claims. Jt. Ex. 7. The issue of employer's duty with respect to other insurance coverage under its contract with the Navy was not addressed at the hearing, and claimant did not request permission to submit post-hearing evidence on the matter. Accordingly, the administrative law judge declined to consider the argument. Decision and Order at 5. As the administrative law judge has great discretion in admitting evidence, 20 C.F.R. §702.339, and as claimant has not shown error on the part of the administrative law judge in rejecting this late submission of evidence, we affirm the administrative law judge's action. See Ezell v. Direct Labor, Inc., 33 BRBS 19 (1999); Sam v. Loffland Bros. Co., 19 BRBS 228 (1987); Hughes v. Bethlehem Steel Corp., 17 BRBS 153 n.1 (1985). Moreover, while the administrative law judge is required to address all relevant issues, the relevancy of employer's alleged breach of contract is questionable, as it does not alter the provisions of the Act or how they would apply to claimant.

Claimant next contends the administrative law judge erred in applying Section 33(g) to this case. He argues that Section 33(g) is not applicable because the United States is not a "person" within the meaning of the Act, and therefore his failure to obtain written approval prior to settling the civil action against the government does not bar his right to benefits. The Director agrees. Employer argues in response that the administrative law judge correctly interpreted the definition of "person" to include the United States. The administrative law judge stated that the United States "does not fit neatly" into any of the categories used to define "person" under the Act. Decision and Order at 8. Nevertheless, he concluded that claimant's interpretation excluding the federal government from the definition based solely on the language of the Act was too narrow. Rather, the administrative law judge determined that the purpose of Section 33(g) to protect employers from insufficient settlements must also be considered, and he found it significant that the Supreme Court of the United States has used the term "third party" rather than "third person" in discussing civil actions and the applicability of Section 33(g). Id. (citing Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 26 BRBS 49(CRT) (1992); Banks v. Chicago Grain Trimmers Ass'n, Inc., 390 U.S. 459 (1968)). This led the administrative law judge to conclude "[t]here is no reason to believe that Congress intended to protect employers from insufficient settlements with a private party but not from insufficient settlements with the federal government." Decision and Order at 8. In light of his conclusion, the administrative law judge found that claimant settled a civil lawsuit with the United States, a third party, for a sum less than the amount of compensation to which he was entitled under the Act without first obtaining employer's written approval and this violated the provisions of Section 33(g), thereby requiring the termination of his benefits. Id.

Section 33(g) states
(1) If the person entitled to compensation (or the person's representative) enters into a settlement with a third person referred to in subsection (a) of this section for an amount less than the compensation to which the person (or the person's representative) would be entitled under this chapter, the employer shall be liable for compensation as determined under subsection (f) of this section only if written approval of the settlement is obtained from the employer and the employer's carrier before the settlement is executed, and by the person entitled to compensation (or the person's representative). The approval shall be made on a form provided by the Secretary and shall be filed in the office of the deputy commissioner within thirty days after the settlement is entered into
(2)If no written approval of the settlement is obtained and filed as required by

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